Biofuels - Systems Integrator

Perspective

Lockheed Martin Helping shape our energy future

Stephen Klotz, PhD April 21, 2011

Copyright © 2011 by Lockheed Martin Corporation as an unpublished work.  All rights reserved.

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State of the Commercial Market Renewable Fuels/Energy have a higher initial cost then

fossil fuels– Incentives / enabling legislation required initially

US Federal Investment Tax Credit (ITC) and grant in lieu Feed-In Tariffs used in Canada, Spain, Germany, Israel,

India Pending Federal Renewable Portfolio Standard (RPS)

– Renewable market dominated by Special Purpose Vehicles (SPVs)

Limited System Engineering in the market– Need broad, long-term view and sustainability

Project financing slow to start – Global capital market slow down has not helped – Banks have not taken many technology risks

Bankable company required to wrap project– Long term PPA/FPA required for bank

financing

Incentives and Enabling Legislation Requiredfor Renewable Energy Market Growth

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Leadership is Key to Making Market a Reality

Why Lockheed Martin inEnergy Generation?Two Perspectives

Experience ManagingLarge Projects

LM Corporate Alignment

Perspective #1

Utility / Bank Market Alignment

Perspective #2

Energy Security

Green Initiatives

Carbon Tax/Trade

New Political Alignment

RPS Mandates

National Imperatives

Systems EngineeringRigor

Supply Chain Management

Value-Added Technology Discriminators

Financeable

U.S. Based Company

Faith of Execution

National Security Imperative

LM Brand RecognitionProvides Growth Opportunity

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Energy Generation Systems Integration Needs

Technology R&D Systems Engineering &Program Management

Modeling & Simulation

Sourcing / Procurement Information Systems Process Optimization

Tools to Partner with Industry to Deliver Affordable Energy

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Concept and inventions

Bench-scale R&D

Feasibility Evaluations

Scale-up to Pilot

Pilot EPCCommercial

Project Feasibility

Scale-up to Commercial

Commercial EPC

Start-up & Commissioning

New Technology Path to Commercialization

Requires “Technology Developer - Integrator - EPC” Team

Concept Pilot DeployValue Chain Analysis• Value Chain Model

Complete feasibility analysis • Technology evaluation

• Process models• Performance analysis• Technical feasibility• Process data package

development• Economic evaluation

• Capital investment• O&M• Engineering economic analysis

• Commercial evaluation• Supply, demand, and price• Competition• Sustainability (policy, social,

environmental)

Technology Development• Technical (TRL) advancement• Pilot development and testing• Scale-up technology vetting

System Integration• Project management &

controls plans• Requirements development• Requirements validation and

verification• Trade studies• Process optimization• Process Hazard Analysis• Reliability analysis

Engineering• Conceptual Design• Preliminary Design• Detailed Design

Procurement• Subcontractor management• Supply chain management

Construction Management• Cost & schedule management• Quality management• Safety management

Commissioning •Testing & documentation

O&M• Spare parts• Operator training• Operations modeling

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Department of Defense Critical Need for Biofuels

DoD is the Largest Single Purchaser of Fuel in the World– $16B+, Purchased through the

Defense Energy Support Center

Navy – “Sail the Green Fleet”– Demonstrate a Green Strike

Group by 2012, Sail it by 2016

Air Force– 2011, test and certify all aircraft

and systems for 50/50 fuel blend

– By 2016, acquire 50% of domestic aviation fuel via alternative fuel blends

“More Fight Less Fuel”

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Summary

Energy and fuel supply are national security issues Renewable energy is here to stay Biofuels solutions provide clean, renewable power, jobs and

economic growth Lockheed Martin brings

– Systems engineering rigor– Proven lean production techniques– Program management– Technology agnostic approaches– Affordability– Financeability

Making Renewable Energy a Reality ……Reliable Energy Affordable and Efficient and …

Safer than Ever!